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Richer Rural India

A new prosperity is sprouting in rural India, with tens of millions entering the pressure-cooker-and-television-owning class and tens of thousands becoming sippers of Scotch, owners of premium tractors and drivers of multiple sedans.

The opening of this new frontier of consumer demand from 700 million people could tip India’s role in the global economy from seller to buyer, from a vendor of outsourced skills to a source of consumers for the world’s wares. Multinational corporations, from Coca-Cola to Nokia, appear increasingly keen to understand Indian villagers.
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In 1990, for every $100 earned by an Indian villager, an urbanite made $82 more. Today, the difference has dropped to $56.

Yet the new rural riches are far from ending poverty. In India, 390 million people still live on $1 a day or less.

What is changing is the nature of the rich-poor divide. That divide was once synonymous with the urban-rural split. The only way to get rich was to live in town, and to reside in the country was to be bound to interminable poverty.